Minister orders external review into "outlier" council over levels of commercial debt from property transactions

Woking Borough Council is to face an external review of its finances after being declared by the Government “an outlier” even among councils that have run up large debts on property transactions.

Local government minister Paul Scully wrote to the council last week: “I have concerns that, despite Woking having the highest level of commercial debt relative to its size of any authority, its debt is forecast to rise even further to almost £2.4bn by 2024/25.

“This makes it an outlier even amongst the other local authorities my officials are engaging with.”

Mr Scully also expressed concerns about lending arrangements for the council’s major developments and the risks involved in long-term high levels of debt.

He wrote: “Due to the complexity of the council’s financial position, I would like advice from an external review into Woking’s finances, investments, and related governance. I would welcome your agreement to such a review, which we can put in place on a non-statutory basis and will help identify how my department can best support you to reduce your financial risk.”

Woking’s debts arose under a Conservative administration that was replaced last May by a Liberal Democrat one led by Ann-Marie Barker.

She said Woking’s high level of debt “resulted from borrowing that my administration inherited to deliver housing, sustainable energy, regeneration and major long-term infrastructure projects”.

Cllr Barker added: “I welcome the support and additional advice from an independent review into the council’s finances, investments and related governance that has been offered on a non-statutory basis.”

The new administration was reviewing major projects and “taking prudent and responsible steps to get the council’s finances on a sustainable footing over the medium-term”.

Officers were working with Surrey County Council’s finance and commercial team to develop an improvement plan intended to “deliver considerable change to how the council funds its investment strategy, reducing our reliance on borrowing and attracting private investment into the borough,” she said. 

Woking’s medium term financial strategy was debated by its cabinet in July.

This noted that council relied for funding many services on income from car parking and commercial rents of £8m and £22m respectively and it “would not be possible to fund [these] if this income was not generated”.

Woking would need savings of £11m over the period to March 2026, it said.

Mark Smulian